Strengthening Consumer Rights: new EU rules proposed to promote out-of-court dispute resolution

A look at the EU’s proposed reforms to make alternative dispute resolution more accessible and effective for consumers and traders

In June 2025, the European Parliament and the Council of the EU, together with the European Commission, reached a provisional agreement to modernise the EU’s framework for alternative dispute resolution (ADR) in consumer disputes. The proposed directive aims to clarify the ADR framework in place across the EU and, assuming it is published, will introduce a series of reforms aimed at making ADR more accessible, transparent, and effective for both consumers and traders. 

These developments are part of a broader global trend towards promoting negotiated, out-of-court solutions to disputes.  

What has been agreed? 

In this context, “alternative dispute resolution” (ADR) refers to impartial, out-of-court processes - such as mediation, arbitration, ombudsman services, and complaints boards - which help consumers and businesses resolve disputes fairly, efficiently, and at low cost.

The EU already had some rules in place dealing with consumer rights and ADR under a previous 2013 Directive (2013/11-EN-EUR-Lex). The proposed new directive seeks to modernise and clarify this framework to reflect the realities of the digital economy and associated cross-border commerce. 

The main changes are: 

1. Encouraging Participation:

Trader participation remains voluntary unless required by national law.

However, Member states are expected to promote ADR through:

• Awareness campaigns to inform consumers of their rights.
• Certification schemes to build trust in ADR providers.
• Financial incentives to encourage trader engagement.

2. Expanded Scope:

The revised directive expands the ADR framework to cover:

• For contractual disputes, issues arising during pre-contractual negotiations (e.g., misleading advertising) and post-contract matters.
• Non-EU traders who trade in an EU member state (if both consumer and trader agree to use the ADR procedure). This recognises the global nature of e-commerce, especially as two in five online purchases by EU consumers involve non-EU businesses.

3. Enhancing Trader Accountability:

Traders must respond to ADR requests within 20 working days—or 30 days for complex cases. If no response is received, the silence is treated as a refusal to engage, establishing a clear expectation of timely participation.

4. Making ADR More Efficient and Transparent:

To improve efficiency and transparency:

• ADR bodies may group similar complaints against the same trader (with consumer consent), enabling faster and more consistent resolutions.
• All ADR entities must maintain accessible websites where consumers can:
  • Submit complaints.
  • Track progress.
  • Access relevant information.
• The directive clarifies the use of automated systems and AI, including translation tools and decision-support technologies.
• The Commission will develop an interactive tool to guide consumers through redress options, including cross-border ADR procedures.

Next Steps

The agreement will now proceed through the final legislative stages:

1. Formal adoption by the Council.
2. Plenary vote in the European Parliament.
3. Publication in the EU Official Journal. Once published, the directive will enter into force after 20 days. Member states will have 32 months to implement the new rules.

Implications for UK Businesses

Although the UK is no longer a member of the EU, these reforms are highly relevant for:

• UK-based businesses trading with EU consumers.
• Digital platforms and e-commerce providers.
• Sectors with high volumes of cross-border transactions.

Voluntary participation in ADR schemes may offer a competitive edge, particularly as consumer expectations and regulatory standards continue to evolve. This reflects a more general trend towards the active encouragement of engagement in ADR, and the increasing prospect of criticism and delay to litigation where parties are unreasonably refusing to do so. 

Burges Salmon’s leading Dispute Resolution team works collaboratively with our clients to resolve complex commercial and cross-border disputes. We are closely monitoring these developments and their implications. For tailored advice on dispute resolution strategy, please contact Elizabeth Pouget, Caroline Brown, Justin Briggs, or your usual contact in our Dispute Resolution team.

Parliament’s rapporteur Laura Ballarín Cereza (S&D, ES) said: “The revision of the ADR directive represents a significant step forward for consumer rights.”

https://www.europarl.europa.eu/news/en/press-room/20250512IPR28371/consumer-rights-deal-on-out-of-court-dispute-resolution-rules?fhch=f656df483971f05826de8f37bb3d32f3